DoD News

News Article

Housing Delays Frustrate DoD

By Jim GaramoneAmerican Forces Press Service

WASHINGTON, Aug. 5, 1998  A quality of life initiative to improve military housing has not gone as fast as defense officials wish, but it is making headway and is starting to pay off, said Pentagon spokesman Ken Bacon July 23.

Bacon said Defense Secretary William S. Cohen is "very concerned about these stories of substandard housing. ... and he wants to do something about it."

A recent General Accounting Office report on military housing questioned whether the military initiative to get private firms to renovate and build military housing would save money. Further, the report said, DoD would have to pay service members more to afford this privately constructed housing.

Bacon said DoD is frustrated over delays in the program, but insists it is the only way to go. There have been successes. Private firms have built 404 housing units in Naval Air Station Corpus Christi, Texas, and another 185 units at the Naval Station Everett, Wash.

"The government put up about $9.5 million for the Corpus Christi project and got $30 million in housing," Bacon said at a July 16 press briefing. "[In Everett], the government put up a total of $5.9 million and got housing units worth $19 million."

Bacon said the program is the only way the department will solve military housing problems. DoD estimates 200,000 of the department's 300,000 housing units are substandard. If the department stuck to traditional ways of doing business, renovating or replacing these units would cost $20 billion and take 30 to 40 years. Using privatization, DoD thinks it can solve housing problems by 2010.

Differences in the ways government and private industry conduct business created delays in the program. When building housing, for instance, the federal government never used to worry about titles, financing and mortgages.

"We didn't have to worry about credit ratings because we just got the money from Congress and we contracted with builders and they built the houses," Bacon said. "Suddenly, in the world of private building and private mortgage financing, we had to develop whole new ways of dealing with contractors."

Developing financial instruments took longer than officials expected and required the help of real estate and Wall Street experts, Bacon said.

With these instruments in place, DoD is ready to push forward with a 420-unit project at Lackland Air Force Base, Texas. A 155-unit project is set for Marine Corps Logistics Base, Albany, Ga. Solicitations will go out later this year for 760 units at Robins Air Force Base, Ga.

DoD is also looking at 20 more projects totaling 30,000 units through fiscal 2000.

Going back to fully financed government housing is not an alternative, according to John Goodman, deputy undersecretary of defense for industrial affairs and installations.

"The department's inability quickly to resolve the shortcomings of its housing programs in light of funding constraints was a major factor in its decision to privatize family housing as a means of maintaining quality of life for our family members," Goodman said in a written statement.

"We also expect commercial management of housing to result in better maintenance than under government ownership, and have put explicit controls into privatization contracts, including mandatory reserve accounts, to ensure this is the case," he said.

Goodman disputed the GAO claim that DoD must increase service members' housing allowance. He said rental costs would be based on members' normal basic housing allowance.

He said Cohen's concern covers all quality of life initiatives. "[Military] compensation is also one of the things we'll be looking at," Bacon said. He noted other quality of life emphases include pay, medicine and retirement benefits.

Bacon said Cohen takes seriously his obligation to look after quality of life initiatives. He said the secretary will spend more time in the next year traveling around looking at living conditions, meeting with troops and surveying quality of life issues himself.

Then-Defense Secretary William J. Perry started the housing initiative in 1996. Congress authorized a five-year test of the program.

"I think we'll be well-positioned to convince Congress that this is a program that should continue," Bacon said, "and perhaps be expanded."